–How one bad legal decision can beget an endless series of bad legal decisions.

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

Mitchell’s laws:
●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor, which ultimately leads to civil disorder.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The penalty for ignorance is slavery.
●Everything in economics devolves to motive.
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American law relies heavily on precedent. Later decisions are linked to earlier decisions by a chain of logic that can extend through many decades, all the way back to the Constitution and even earlier.

Early decisions are the ingredients for later cakes.

No law or legal decision is an island unto itself. A wise judge takes that fact into consideration.

Sadly, our current Supreme Court has become ultra, right-wing political, not wise, so its decisions reflect the wishes of the upper .1% income/power group. Prime example: The Court’s Citizens United decision, that corporations have the same free speech rights as people, which favoring the rich, ranks among the more regressive decisions in the Court’s history.

Could Citizens United and a semi-colon undo Obamacare?
National Constitution Center By Scott Bomboy
March 21, 2014 6:24 AM

Next Tuesday, the Supreme Court will hear two cases related to the Affordable Care Act, or Obamacare, and the stakes are high for both sides. In fact, the interpretation of a semi-colon in the context of the First Amendment could play a critical role.

“Appellants also argue that Citizens United is applicable to the Free Exercise [of religion] Clause because ―the authors of the First Amendment only separated the Free Exercise Clause and the Free Speech Clause by a semi-colon, thus showing the continuation of intent between the two,” said circuit judge Robert Cowen in the Conestoga Wood appeals court decision.

The semi-colon argument holds that the free exercise of religion and free exercise of speech are linked. Since the Citizens United case gave corporations the same free speech rights as people, the argument states that corporations should have the same free religious exercise rights as people, too, and they should be able to opt out of Obamacare.

The argument is ridiculous — or would be, were it not for the equally ridiculous Citizens United decision, which creates precedent for all sorts of mischief. Not only did that decision provide additional rationale for billionaires to use tax avoiding corporations as secret cover for controlling elections, but it sets the stage for other arguments taking the Constitution far afield.

Citizens United, under the guise of “free speech,” allows rich people more free speech than poor people. Lots more. Further, it arguably allows corporations all the rights of people.

For instance, being born in the U.S., you have all the rights of a citizen. Does a corporation, “born” in the U.S., have all the rights of an American citizen?

Does it also have voting rights? Can corporations adopt children? Can a corporation go to jail if it breaks a law? Can a corporation receive a marriage license and thereby receive the tax benefits of marriage? And what if some shareholders, officers, etc. are foreigners. What then are the rights of the corporation? Does a corporation need a visa or passport?

And so we come to the Hobby Lobby and Conestoga Wood cases:

In Sebelius v. Hobby Lobby Stores, Inc., the national hobby and crafts chain store asked the Court to take on the birth control mandate that applies to for-profit companies.

The issue in the Hobby Lobby case is if the company is protected under the 1993 Religious Freedom Restoration Act, which says the government “shall not substantially burden a person’s exercise of religion” unless that burden satisfies strict scrutiny. Hobby Lobby claims as a family-owned company, its religious rights are violated by Obamacare.

In the Conestoga Wood case, a Mennonite family-owned, profit-making business claims that the ACA’s birth control mandate violates the company’s rights under the First Amendment free exercise clause and the federal Religious Freedom Restoration Act.

If a corporation has the free speech rights of an American citizen, who determines what that speech shall be? Is a corporation merely a surrogate for its president? Or its chairman? Or its board of directors? Or its shareholders? Or its employees? Or the employees’ union? Whose free speech are we talking about?

The Supreme Court, in its unseemly haste to favor the rich over the rest, has opened the door to all sorts of related questions.

What is the religion of a corporation? Is it the religion of the above-mentioned president? Or of the chairman? Or of the directors or shareholders? Or of the employees or union?

What shall we make of a corporation owned mostly by Christians, but which hires Jews and Muslims and even promotes Jews and Muslims to executive positions? When is it a Christian corporation and when is it not? Does it lose its “Christianity,” if some of its stock is sold to non-Christians?

And what if some of those Christian owners, executives, etc. are Catholic and some Protestant of various denominaions? What makes this corporation Catholic or Protestant? Does a “Muslim corporation” have legal redress if a Christian corporation refuses to hire it for a job, because of anti-Muslim bigotry?

Yes, bad law tends to extend its tentacles:

The Hobby Lobby-Conestoga Wood case is the first of more than 90 related cases filed by other religious-oriented plaintiffs, including hospitals, social service agencies, universities, schools, and companies.

Kaiser Health News estimates that more than 1,000 religious institutions and other employers with millions of employees have objections.

Here it comes. Every religion has its priorities. And if we assume corporations have the same rights as people, who has the right to decide a corporation’s religion, even when most of the employees and customers are of a different religion?

“Oh what a tangled web we weave, when first we practice to deceive” the American public, and to please our wealthy benefactors! Yes, the whole thing is ridiculous, but when you begin with ridiculous incredients, you aren’t going to get a sensible cake.

Interesting times ahead for what arguably will be remembered as one of our less admired Courts. Let’s see how they try to wriggle out of the complex maze they have built. Will they cook up an even more pro-right wing (rich), anti-left wing (poor) complexity. Soon the Court will attempt to bake a cake using the bad ingredients of its own making.

Note to Supreme Court justices: No matter what you do now, you will look like fools.

Rodger Malcolm Mitchell
Monetary Sovereignty

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Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)
9. Federal ownership of all banks (Click here)

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10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
Two key equations in economics:
1. Federal Deficits – Net Imports = Net Private Savings
2. Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports

THE RECESSION CLOCK

As the federal deficit growth lines drop, we approach recession, which will be cured only when the lines rise. Federal deficit growth is absolutely, positively necessary for economic growth. Period.

#MONETARY SOVEREIGNTY

cut debt, cut deficits, cut medicaid, cut medicare, cut social security, cut spending, cut taxes, cut the budget, eliminate FICA, filibuster, income gap, MMT, modern monetary theory, monetarily non-sovereign, monetarily sovereign, monetary non-sovereignty, monetary sovereignty

–“If you’re poor, stop being poor.” A must-see video.

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

Here is the definitive, right-wing solution to poverty and health care. (You decide whether this video is howlingly hilarious or truly sad.):

Fox commentator admits America has Third World health care

The real solution — the only solution — is federally funded, free, comprehensive, no deductions Medicare for every man, woman and child in America.

Why don’t we have it? Because the upper 1% income/power group doesn’t want us to have it. They want us to believe that if the government pays for it:

1. The government will run out of dollars. You and I won’t.
2. We’ll have a Weimar, Zimbabwe, Argentina hyper-inflation (which we never have had in almost 240 years of wars, depressions, recessions, plagues and right-wing politicians).
3. Our grandchildren will have to pay the federal debt (rather than paying for our health care).
4. Health care will be worse, because the government is not as wise, generous or compassionate as the rich insurance companies, which are famous for their wisdom, generosity and compassion.
5. Poor people are “lazy” (per Paul Ryan) and are takers looking for a free lunch, and if you’re poor, stop being poor.

Who could argue with such facts?

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

–Ritholtz right — but mostly wrong — about QE

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

Barry Ritholtz is a self-proclaimed expert, who when I tried to explain Monetary Sovereignty, wrote: “Jeebus, you fucking sovereign guys are such dreadful bores.” On such brilliance does his reputation lie. [See link]

Recently, he wrote an article published in the Bloomberg View, and I felt obligated to contact the editor, so as to help spread Barry’s fame.

Here is the full text of the article:

Mr. Greiff:

This is re. your article in Bloomberg View: Understanding why you think QE didn’t work, by Barry Ritholtz:

As you know, QE (Quantitative Easing) is the Fed’s purchase of privately-owned T-securities. The above-mentioned article states that people are wrong to believe QE doesn’t work. He’s right, but for the wrong reason.

He claims people don’t think QE works, because the economy has not recovered much, despite several QEs. Ritholtz says people don’t consider the counterfactual, i.e what would the economy have been without QE.

Again, he is right, but again he is wrong about why QE actually does not work, i.e. QE does not stimulate the economy, because it was not designed to stimulate the economy.

By “redeeming” T-securities before their redemption date, the Fed reduces the supply, which increases the price of those T-securities still available. As with all fixed interest securities, when the price goes up, the interest rate goes down.

The sole purpose of QE was to reduce long term interest rates, and by all available evidence, reducing interest rates does not stimulate anything. In fact, it is recessionary. (See: Low interest rates do not help the economy.)

QE does not add dollars to the economy, for the simple reason that those dollars already are in the economy. T-securities are nothing more than deposits (similar to savings accounts) at the Federal Reserve Bank. To redeem your T-securities, the federal government merely transfers your dollars from your T-security account to your checking account.

The process is identical with transferring dollars from your savings account to your checking account. No new dollars created.

Unless you believe that transferring dollars from your savings account to your checking account is stimulative, you readily can see that QE adds no dollars to the economy, and so stimulates nothing.

But, why is QE recessionary? Because by lowering interest rates, QE reduces the amount of interest the federal government pays into the private economy.

So, bottom line, Ritholtz is correct that criticisms of QE are misplaced, but not for the reason he suggests. QE was designed not to work, because by reducing the amount of interest the federal government pays, QE reduces the deficit — and that was the goal all along.

QE is an austerity tool, and austerity is a lie, sold to the populace — a lie that absolutely is guaranteed to depress an economy. It’s part of the BIG LIE.

Because the poor are hurt by recessions more than are the rich, the purpose of austerity is to widen the gap between the rich and the rest. It’s what the rich pay the media and the politicians to do.

Now we are tormented with the headline, “Federal Reserve continues scaling back bond buying, By Jim Puzzanghera, LA Times“, which is akin to saying, “Fed will reduce its efforts to slow the economy”

Some excerpts:

With the economy slowly improving, Federal Reserve officials are shifting their efforts from stimulating the recovery to restoring normal monetary policy — although new Chairwoman Janet L. Yellen tried to stress that day remains far away.

Central bank policymakers voted Wednesday to cut the Fed’s bond-buying stimulus program to $55 billion a month, the third reduction since December.

Federal Reserve Chair Janet Yellen said the central bank is still falling short of its goals for full employment and price stability.

It is unknown how transferring dollars from T-security accounts to checking accounts, while reducing federal deficit spending, will help achieve full employment and price stability. But explanations are for chumps, not for those in authority.

Yellen indicated rates could start rising as soon as early next year. The comment sent the Dow Jones industrial average tumbling 170 points in a matter of minutes.

See, it’s like this. If the Fed plans to do less to harm the economy, stocks will fall, because . . . uh well, because.

The market reaction demonstrated the worries investors have that the Fed’s era of easy money is coming to an end.

I must have encountered that term “easy money” a thousand times, and still don’t understand it. Borrowers have more difficulty getting loans today, than in the past. And lenders earn less interest (Have you looked at your CD rates, lately?). Further, the government pumps less money into the economy when rates are low.

So what’s “easy”? ‘Tis a mystery.

“My goal — and I will throw myself into this as wholeheartedly as I can — is to make rapid progress, as rapid progress as we possibly can, in getting this recovery back on track and putting Americans back to work,” Yellen said.

The BIG LIE is alive and well in Washington.

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

–As usual, the Fed is expected to do its job — and Congress’s job

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

As usual, the Fed is expected to do its job and Congress’s job.

TIME
Markets Need Janet Yellen to Kick Them in the Pants
Rana Foroohar March 19, 2014

She gets hammered by pundits and bankers alike for supposedly ending Bernanke style clarity . . .

“Clarity.” The only one deeper into deliberate obfuscation was Greenspan (so maybe today, less double-talk is considered “clarity, by some.)

For starters, Bernanke’s “clarity” over the last few years was largely Yellen’s doing, in the sense that she’s the one that came up with the 2 % inflation target rate . . ..

Then, there’s the supposedly “hawkish” rate increase (the median interest rate forecast increased 0.25 % to 1 %)

Again, let’s all practice mindfulness, and focus on what we know will happen if rates stay low forever. Bubbles will form—and they will pop.

This gets to the myth that low rates stimulate the economy, when in fact, there is zero relationship between low interest rates and GDP growth.

And as for bubbles, she probably is referring to the real estate “bubble,” which was not caused by low rates, but rather by bad lending practices. (No matter what the rate, if you give everyone off the street a 100% loan against phony collateral, you’re going to have a bubble.)

The Fed’s $4 trillion money dump has already created what Yellen and other Fed leaders know are price distortions in everything from emerging market equities to commodities to certain real estate markets.

The so-called “money dump” was Quantitative Easing (QE), which didn’t dump any money and didn’t stimulate the markets.

The sole purpose of QE was to keep long-term interest rates low. Period. (The Fed has direct control over short term rates via the Fed Funds rate.)

But that isn’t stimulative, although it did distort prices. (When was the last time you bought a bank CD?)

Many people might wish that the Fed’s easy money and low-interest rate policy could do more for the economy, it probably can’t.

Not “probably” can’t. Absolutely can’t.

There are complicated structural reasons why we are in the longest and weakest recovery of the post WW II period.

Structural, yes. Complicated, not so much. The simple reason is the deficit is too low and is declining. (See: The Recession Clock ticks; the recession draws closer

That shows just how dependent investors have become on Fed news going in one direction only and how removed some asset prices have become from fundamentals.

Asset prices are not removed from fundamentals. They are removed from what the Fed, the market, Congress and Ms. Foroohar claim are the fundamentals.

Yes, there are several fundamentals, but by far the most important one is federal deficit spending, i.e. money creation, and that is Congress’s job, not the Fed’s job.

If I were President, this is what I would tell the Fed Chairman: “You have one job: Keep inflation near a 1.5% – 2% target.

“Forget about then stock markets. Forget about housing, and the crooked bankers and GDP. Those are all the responsibility of Congress and me.

“Focus all your attention on inflation.

“If you see inflation begin to creep up, raise interest rates. If we are in danger of deflation, lower interest rates. That is your job.”

But what is the likelihood of that, when Congress and the President have a handy whipping boy to blame for economic problems (while taking all credit for any recovery).

My question is: If Congress and the President are not responsible for the economy, what the hell is their job?

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

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